Bob Fultz and Jack Hardie each withdrew cash of \(\$ 40,000\) for personal use during the year. Using the data from situation (c) in Exercise 12-16, journalize the entries to close 

(1) net income to the partners

(2) the partners' drawing accounts. Explanations are not required. What was the overall effect of these events on partnership capital? 

Exercise 12-16

Bob Fultz and Jack Hardie form a partnership, investing \(\$ 40,000\) and \(\$ 80,000\), respectively. Determine their shares of net income or net loss for each of the following situations:

a. Net loss is \(\$ 90,000\) and the partners have no written partnership agreement. 

b. Net income is \(\$ 60,000\), and the partnership agreement states that the partners share profits and losses on the basis of their capital balances. 

c. Net income is \(\$ 100,000\). The first \(\$ 60,000\) is shared on the basis of partner capital balances. The next \(\$ 30,000\) is based on partner service, with Fultz getting \(40 \%\) and Hardie \(60 \%\). The remainder is shared equally.